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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Pakistan Among Top 10 Countries With Fastest Growth of Ultra-Rich Population

Pakistan is among the countries with top 10 fastest growing population of ultra-high net-worth (UHNW) individuals over the last 5 years. Bangladesh with 17.3% UHNW growth tops the list followed by China (13.4%), Vietnam (12.7%), Kenya (11.7%), India (10.7%), Hong Kong (9.3%), Ireland (9.1%), Israel (8.6%), Pakistan (8.4%) and United States (8.1%), according to World Ultra Wealth Report 2018.

The report compiled by Wealth-X defines ultra-high net-worth (UHNW) as an exclusive group of wealthy
individuals located across the globe, each with a net worth of $30m or more. Only the top 1.1% of the world's 22.25 million millionaires qualify for inclusion in UHNW group.

Here's an excerpt of the Wealth-X report:

"According to Wealth-X estimates of global private wealth, the number of individuals with net
assets of more than $1million totaled 22.3 million in 2017, with a combined net worth of $91.7 trillion. A
breakdown by tier shows not only the considerable share of wealth held by the small cohort of
UHNW individuals, but also that the ultra wealthy experienced faster growth in net worth
than each of the three lower tiers.
Almost 90% of all millionaires had a net worth of between $1m and $5m, with this group
of 19.6 million individuals holding a 40% share of global millionaire wealth. Exclusivity
rises significantly above the $5m threshold, as does average net worth. For example, those
individuals with net assets of between $10m and $30m – the closest to attaining UHNW
status – held 14% of global millionaire wealth, while accounting for a 3.6% share of the
population. Rising higher still, the global ultra wealthy population accounted for just 1.2% of
the world’s millionaires but held 34% of the collective wealth. Whereas population growth
rates across the different wealth tiers were very similar in 2017, an increase of 16.3% in total
UHNW wealth significantly outpaced the average rise of around 12.7% in each of the other
three tiers."

Wealth-X report ranks Pakistan 9th in terms of ultra-rich individuals' growth while Bangladesh is ranked first and India ranked 5th. The relatively slower growth of ultra-rich in Pakistan is supported by other wealth reports as well. For example, data released by Credit Suisse with its Global Wealth Report 2017 shows that Pakistan is the most egalitarian nation in South Asia. It also confirms that the median wealth of Pakistani households is three times higher than that of households in India.

Wealth Inequality:

Inequality is measured in terms of Gini index. It ranges from 0% for perfect equality (when everyone has the same wealth) to 100% for total inequality (when all of the wealth is owned by one person). On this scale, Pakistan’s Gini index is 52.6%, Bangladesh’s 57.9%, Sri Lanka’s 66.5%, Nepal’s 67.3%, China’s 78.9% and India's 83%.

Growing household wealth in developing nations like India and Pakistan is reflected in ownership of consumer durables like computers, home appliances and vehicles. This data is sourced from periodic household surveys like NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.

Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.

Income/Consumption Growth in Pakistan. Source: KSBL

Rapid Income Growth:

Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014. The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.

Summary:

Pakistan is among the countries with top 10 fastest growing population of ultra-high net-worth (UHNW) individuals over the last 5 years. Bangladesh with 17.3% UHNW growth tops the list followed by China (13.4%), Vietnam (12.7%), Kenya (11.7%), India (10.7%), Hong Kong (9.3%), Ireland (9.1%), Israel (8.6%), Pakistan (8.4%) and United States (8.1%), according to World Ultra Wealth Report 2018. Credit Suisse wealth data for 2017 shows that Pakistan has the lowest wealth inequality in its region as measured by Gini index. Lower inequality can be seen in terms of rising percentage of households that can afford to buy durables like appliances and vehicles as reported by Dr. Abdul Ghani of Karachi School of Business and Leadership (KSBL).

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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